Individual Interactions, Group Conflicts, and the Evolution of Preferences

This paper provides a unified framework for studying the effects of economic (and other) institutions on the evolution of preferences, taking account of conformist cultural transmission, social segregation, and the simultaneous operation of selection processes at the individual and group level. Price's equation (1970) for the decomposition of selection processes into within- and between group-effects is used to take account of inter group conflicts, group extinctions, and the emergence of new groups. The resulting multi-level selection process is illustrated by emergence and consolidation of the modern national state (along with the cultural traits supporting it) through a process of inter group warfare in the four centuries after 1500. In the penultimate section I use the model to study the effects of social institutions (and by implication economic policies) on the evolution of preferences. Some implications for constitutional and policy analysis are addressed in the conclusion.